The Minnesota lawsuit alleges Discover made aggressive, misleading and deceptive telemarketing calls to customers to sell financial products. These include its Identity Theft Protection program and Payment Protection plan, which allows customers to postpone payments in the event of financial hardships such as job loss or disability."The company charged some consumers for expensive add-on financial products without their understanding that their credit cards would be charged," Swanson (right) said in a statement. "The irony is that the credit card company markets these products as a way for consumers to protect themselves from fraudulent or unauthorized credit card charges and financial instability in the bad economy."

Discover says that it doesn't comment on pending litigation, but spokeswoman Leslie Sutton said in a statement that Discover cards have enjoyed the highest level of customer loyalty among leading brands for 13 years.

"It's not in Discover's interest to sell a product that doesn't enhance our relationship with our cardmembers," Sutton said, pointing out that these products can be canceled for a full refund within 90 days. "The vast majority of our cardmembers, however, maintain the products for the benefits they offer. The cancellation rate for Discover's protection products is low and continues to decline."

The lawsuit echoes a class-action suit filed earlier this year by the law firms Paris Ackerman & Schmierer, Nagel Rice, and Carey, Danis & Lowe against Discover for using "confusing and misleading sales tactics to enroll customers into the Payment Protection program without their knowledge or authority."

"It strikes us as extremely audacious that a company like Discover, with all the economic problems, lack of available credit and people in foreclosure, would look for a way to squeeze cardholders by enrolling them in a program they never agreed to," David Paris, one of the lawyers in the class-action, told Consumer Ally. "This is tantamount to outright theft."

The Minnesota lawsuit alleges that Discover telemarketers typically lured customers into believing that they were receiving a courtesy call to make them aware of the card's benefits, only to discover after the fact that they'd been enrolled in one of its programs. In many cases, the suit says, Discover refused to refund its customers.

In some cases, Discover simply charged customers for additional services they never agreed to purchase. Discover telemarketers also tricked customers into buying services by getting them to answer "yes" to a supposedly innocent question, the suit alleges, and then used that response as an authorization to bill their credit cards. Other customers were led to believe they were only giving the company permission to mail them promotional material, before ultimately discovering additional charges on their statements for services that they never approved.

Sales tactics, the suit alleges, included telemarketers butchering the wording of so-called disclosures, omitting key words, running sentences together, pausing at random and speed-reading, all of which were designed to confuse consumers. Telemarketers would also gloss over the price of a service or the fact that the consumer was purchasing it, emphasizing portions of the script that didn't imply that a sale was taking place.

The Payment Protection plan costs $0.89 for every $100 of outstanding balance per month, or $534 per year on a $5,000 balance. The Identity Theft Protection plan costs $12.99 per month, approximately $160 per year. Other Discover services mentioned in the suit include Wallet Protection and Credit ScoreTracker.

Some Discover customers, the suit says, paid hundreds of dollars before detecting the unauthorized charges on their monthly statements. "For these consumers, the company reaps a double-windfall because it profits from the sale of a product that the consumers didn't know they had and therefore won't use," the attorney general's office said in a statement.

Discover, one of the nation's leading credit card companies with some 54 million customers, earned nearly $300 million from the sale of these financial products in 2009 -- $80 million more than it earned on them in 2007. Discover's net income for 2009 totaled $1.3 billion.